Q4 2025 Pilgrims Pride Corp Earnings Call [BACKUP]

February 12, 2026

[Analyst]: Two factors on the two extremes, slow versus aggressive effort, attention, and the resumption or lack of cattle imports could impact chicken demand and therefore broiler margins. Thanks.

And the resumption or lack of kettle imports could impact chicken demand and therefore broiler margins. Thanks.

Fabio Sandri: Yeah, I think when we look at the retail, and I mentioned that we saw the spreads at the highest number ever, right? I think this is something that's been growing over time. I think 2025 and 2026 has been exacerbated by the effects that you just mentioned on the price of the live animals here in the US, and some capacity reductions in the beef industry. I think it's very difficult to look at the sensitivity on the, how much that delta needs to be to trigger trade downs. But I think what we are seeing is that the consumer really impacted in the inflation, especially on the food away from home, and we are seeing all this demand for chicken in the retail.

Yes, I think when you look at the retail and I mentioned that we saw the spread at the highest number ever right and I think this is something that has been growing over time and I think 2025, and 2026 has been exacerbated by the effects of that.

Just mentioned on the price of oil.

After life animals here in U S and some capacity reductions in the.

In the beef industry.

I think it's very difficult to look at the sensitivity.

How much of that delta needs to be to trigger trade down.

But I think what we are seeing is that the consumer really.

Impacted in the inflation, especially on the food away from home and we're seeing all this demand for chicken in retail and I think it's the same in the foodservice as I mentioned is a matter of availability because when you look at the USDA expectations for 2056 is for the production of between down.

Fabio Sandri: I think it's the same in the food service, as I mentioned. It's a matter of availability, because when you look at the USDA expectations for 2026, is for the production of beef going down. So it would depend a lot more on the imports and what type of cuts will come from these imports from South America and other regions. So we don't expect the prices of beef to reduce significantly during 2026, as you mentioned, because of the retention that have started. So I think that could be something that we will see in 2027. But I think overall, we are seeing a very strong demand for chicken, both in retail and food service.

So it will depend a lot more on the inputs and what type of cuts will come from these imports from South America and other regions.

So we don't expect the prices of beef to reduce significantly during 2026 as I mentioned because of the retention that have started so I think that could be something that we will see in 2027.

But I think overall, we're seeing a very strong demand for chicken both in retail and foodservice.

[Analyst]: Thank you. That's helpful. And for my follow-up, I was wondering, I think you touched on it briefly in your prepared remarks, but if you could just give a brief state of the union of the disease pressure you're seeing, like in Spain with... I know we've seen somewhere between, like, 100 to 150 positive cases of ASF in Spain, but yeah, anything else you can add there would be great.

Thank you that's helpful for.

For my follow up I was wondering I think you've touched on it briefly in your prepared remarks, but if you could just give a brief state of the union of the disease pressure Youre seeing I can Spain with I know, we've seen somewhere between like 100 to 150 positive cases of ASF in Spain, but.

Anything else you can add there would be great.

Fabio Sandri: Yeah, of course. Our European business has been impacted, because of that. I think what we are seeing is the ASF in Spain. Spain is one of the largest producer in the world of pork, and because of the ASF, they've been banned from exporting to China. Because those exports don't go to China, they end up in the European region, typically in UK. And that is generating a lot of supply, especially in the sausage business. And that is creating some impact in our branded business, because our Richmond brand, it's a well-established brand in UK. When it's competing with this external meat and all this private label sausage, it end up impacting in prices. And that's why we mentioned that the Richmond brand was facing some challenges during Q4.

Yes of course, our RPM business has been impacted for because of that I think what we are seeing deals the ASF into Spain, Spain is one of the largest producer in the world of pork and because of the ASF they've been.

Dan from exporting to China, because that those exports noble to China. They end up in the European region typically in U K and that is.

Generating a lot of supply, especially for us in the sausage business and that is.

Creating some impact in our branded business because.

Our Richmond brand, it's a well established brand in U K when it is competing with this external meat and all of this private label sausage. It end up impacting in prices and that's why we mentioned that the Richmond brand was facing some challenges during Q4, but we expect some promotional activity and <unk>.

Fabio Sandri: But we expect some promotional activity and resilience of that brand is amazing. We've been growing year over year, so we expect that impact to reduce. Now, how long that is gonna continue on the ASF in Spain, and how is that going to impact long term the UK? I don't think that that is something that we can foresee, but I don't believe that it's gonna be a long-term impact, as we are seeing the herd being reduced throughout Europe.

Zillions of that brand. It is amazing we have been growing year over year. So we expect that impact to reduce now how long that is going to continue on the ASF.

In Spain, and how is that going to impact.

Long term the U K I don't think that that is something that we can foresee but.

I don't believe that is going to be a long term impact as we are seem to hurt being reduced throughout Europe.

[Analyst]: Okay, great. Thank you very much.

Okay, great. Thank you very much.

Yeah.

Operator: Your next question comes from Leah Jordan with Goldman Sachs. Please go ahead.

And your next question comes from Lee of Jordan <unk> with Goldman Sachs. Please go ahead.

Leah Jordan: Thank you. Good morning. I wanted to go back to your comments about food service in the US. You know, you talked about the consumer shifting to retail, which is a headwind for the channel, but you continue to grow nicely. So just seeing if you could provide more detail on the demand you're seeing there, any nuance between QSR versus others, and how much can new business wins continue to offset any broader industry slowdown there? Or how do you think about lapping the strength that you've had over the past year in innovation and LTOs?

Thank you and good morning, I was hoping to go back to your comments about foodservice in the U S.

You talked about the consumer shifting to retail which is the head and from the channel that you continue to grow nicely. So just seeing if you could provide more detail on the demand youre seeing there any nuance between <unk> versus others.

How much from new business wins continued to offset any broader industry slow down there or how do you think about lapping the strength that you've had over the past year and innovation in <unk>.

Fabio Sandri: Yeah. Thank you, Leah. Yeah, when again, like I mentioned, the food service traffic is challenged and has been challenged over last year, and the food service operator are looking for promotional activity to drive traffic. When you drill down into the segments, what we are seeing is a slowdown in the food service restaurants, compensated by increases in the non-commercial, especially hospitality, schools, and growth in the national accounts. When you look at the promotional activity, it has been even the known chicken QSRs are doing a lot of promotions with chicken. And we saw the increase in the overall industry close to 3%.

Yes, Thank you Leah.

Again like I mentioned, the foodservice traffic is chat.

Challenge and has been challenged over the last year and the foodservice operators are looking for promotional activity to drive traffic.

Drew bow into the segments, but we are seeing is the slowdown in the full service restaurants compensated by increases in the non commercial.

Specially hospitality schools and.

Growth in the national accounts.

But when you look at the promotional activity has been even the non chicken keywords Sars are doing a lot of promotions with chicken and we saw the increase in the overall industry close to 3%.

Fabio Sandri: So we don't expect that to change during 2026, for the factors that we already mentioned on the availability of lean beef on the burgers and the availability of other proteins, and the affordability and versatility of chicken.

So we don't expect that to change during 2003 to six for the factors that we already mentioned on the availability of lean beef on the on the on the burgers and the ability of other proteins and the affordability.

Versatility of chicken.

Leah Jordan: Okay, great. Thank you. And then just for my second question, just wanted to ask about Just Bare a little bit more. You've shown some nice acceleration across prepared foods overall, but Just Bare has been really strong for you with the share gains that it's had. You know, I know we're still waiting on that new plant to open, but how do you think about growth for that brand over the coming year? You know, considering distribution and velocity, and then you think ultimately longer term, you know, how do you think about continuing to increase brand awareness or household penetration there?

Okay, great. Thank you.

And then just for my second question just wanted to to ask about just bear a little bit more you send some nice acceleration across prepared foods overall, but just bear has been really strong for you with the share gains that it's had I know, we're still waiting on that new plant to open.

But how do you think about growth for that brand over the coming year, considering distribution and velocity and then you think ultimately longer term.

How do you think about continuing to increase brand awareness or household penetration there.

Fabio Sandri: ... Thank you. That is a great point, and I think, the brand awareness is still not at the levels of national expansion that we expected. But we are seeing that, Just Bare is the number one in terms of velocity, where we are, and I think that's very important for the retailers. As we are discussing with our key customers on the distribution side, if you have Just Bare in your, shelves, you can see that, the shelf is turning faster than with any other segment. I think it's innovation, which is gonna play, for us to continue to grow. I think we have a very strong core products, but we can innovate and stretch that brand to some other, different, being chop and form, because it's a whole muscle today. But there's a lot of opportunities in chop and form.

Thank you, it's a great point that I think.

The brand awareness is still not at the levels of national expansion that we expected, but we are seeing that just barrick is the number one.

In terms of velocity, where we are and I think that's very important for the retailers as we are discussing with our key customers on the distribution side. If you have just bear in your shelves you can see that in the <unk>.

<unk> is turning faster than with any other segment I think it is innovation, which is going to play.

For us to continue to grow I think we have a very strong core products, but we can innovate and stretch that Brent just some other different being chopped and formed because it's a whole muscle today, but there's a lot of opportunities isn't shopping for them and the just bare brand promise is exactly what the consumer is looking for.

Fabio Sandri: The Just Bare brand promise is exactly what the consumer is looking for today, which is a clean label, no additions of antibiotics or any other items that the consumer is looking at today on the labels and comparing. And that's why that is resonating so well with the consumer. So it's gains in distribution, because we're still not very national. We went from 1% to 13% market share in a matter of five years, but we still have a lot of distribution to gain. And the velocity, that will continue because of how the brand and the brand promise is resonating with our consumers.

For today, which is a.

Clean label.

No additions of antibiotics or or any other items that the consumer is looking today at the labels and compare it and Thats why that has resonated so well with the consumer so it's <unk>.

<unk> and distribution.

Because we are still not very national we went from 1% to 13% market share in a matter of five years, but it has to have a lot of distribution to gain and the velocity that will continue because of how the brand and the brand promise is resonating with our consumers.

Heather Jones: Great. Thank you.

Leah Jordan: Great. Thank you.

Great. Thank you.

Operator: Your next question comes from Thomas Henry with Heather Jones Research. Please go ahead.

And your next question comes from Thomas Henry with Heather Jones Research. Please go ahead.

Heather Jones: Good morning, folks. Thanks for taking the question. On Europe, could you elaborate on any trends besides the seasonality driving the strong volume performance? And any expectations that be continuing into 2026? Thank you.

Good morning, Thank you for taking the question.

On Europe could you elaborate on any trends besides the seasonality driving the strong volume performance and.

Any expectations that these engineering into 26, thank you.

Fabio Sandri: Yeah, I think it's a normal seasonality. We see the end of the year, a lot of promotion activity in terms of hams and bacon and other cuts. But as a long-term trend, what we are seeing throughout the year is the growth of chicken. That's more important than the seasonality. I think the consumer is facing the same challenges in Europe that they are facing in the United States on the inflation. And when you look at the breakdown of the growth in total grocery, grocery is growing 4%, but chicken is growing 8% to 10%. So there is the seasonal effects, and we saw some growth in the fresh pork, close to 5% this quarter, but the long-term trend is a more growth in the chicken side.

Yes, I think it is a normal seasonality we see the the.

And a year and a lot of promotional activity in terms of hands in vehicles and other cuts but.

Long term trend what we are seeing throughout the year is the growth of chicken that's more important than the seasonality.

I think the consumer is facing the same challenges in Europe that are facing in United States on the inflation and when you look at.

The breakdown of the growth in total grocery grocery is growing 4% with chicken is growing 10%.

So there is the seasonal effects and we saw some some some growth in the fresh pork closer to 5% this quarter, but the long term trend is a more growth in the chicken side.

Fabio Sandri: Of course, with the innovations that we are doing, the partnerships that we are doing in Europe on the meals, we are also creating some new lines that are generating great results. The meals are a very affordable way for a family to have their needs. So I think it's something that we're investing together with key customers on differentiating, creating better experiences for our... And differentiating in terms of ethnicity for the consumers.

Of course with the innovations that we are doing the partnerships that we are doing in Europe on the meals were also creating some some new lines that are generating.

<unk> results the meals are a very affordable way for our families to have.

Their needs. So I think it's something that we are investing together ricky customers on differentiating creating better experiences for our.

Differentiate in terms of technique.

City for the consumers.

Okay.

Operator: Your next question comes from Guilherme Palhares with Santander. Please go ahead.

And our next question comes from Johan <unk> with Santander. Please go ahead.

Yes.

Guilherme Palhares: Morning, everyone. Thank you for taking my questions. Just two quick ones. The first is: where do you see today the capacity of grandparents of chicken in the US? And the second one, if you could talk a bit about the new trade permit of EU towards the Brazilian chicken, and whether this could have any impact on the business there. Thank you.

Good morning, everyone. Thank you for taking my questions just two quick ones.

Thursday.

Yes.

Today, the capacity of grandparents of shipping in the U S.

And the second one if you could probably add about the new trade for me.

EU towards that Brazilian chicken and know whether this could have any impact on the business day.

Thanks.

Fabio Sandri: Yeah, thank you. On the grandparents, the information we have is the USDA information. When we talk about the size of the breeding flock, it includes the grandparents. And when we look at the number, it is down 1.9%, and that includes the processors and includes the grandparents. So I don't see any, or we don't have any information about significant increase in the grandparents size of that. On the impact of the Mercosur agreement, or the UK, Europe, and Brazil, what we are seeing is the normal continuation of a long-term export from Brazil, which is one of the largest chicken exporter to Europe. I think Brazil typically export breast meat, and that breast meat goes to the food service. When you look at the UK consumer, they give great value to the provenance.

Yeah. Thank you on the grandparents information when you have as the USDA information when we talk about the size of the breeding flock. It improves the grandparents and when we look at the number it is down one 9% and that includes the processors and includes the grandparents. So I don't see any.

Or we don't have any information about the significant increase in the grandparents.

Five.

On the impact of the medical sale agreement or the.

U K.

Europe and Brazil, what we're seeing is the normal continuation of a long term export.

Brazil, which is one of the largest chicken exports to Europe I think in Brazil.

Typically export breast meat.

And that breast meat goes to the foodservice when you look at the UK consumer they give great value to the provenance.

Fabio Sandri: Our chicken business, and our pork business in Europe, are mainly on the retail side because we are local producers. Because the standards of producing in the UK, both chicken and pork, are higher than everywhere, everywhere else in the world. So the consumer pay a premium, and they have this important trait of provenance. So when we look at the impacts of these agreements, it's more on the food service end...

In our <unk>.

<unk> business and then our pork business in Europe are mainly on the retail side because.

Our local producers because the standards of producing in UK, both chicken and pork are higher than everywhere everywhere else in the world. So the consumer pay a premium and they have this important traits of proper.

So when we look at the impacts of these agreements it's more on the foodservice.

Q4 2025 Pilgrims Pride Corp Earnings Call [BACKUP]

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